Managing through Commodity Price Volatility from Multiple Perspectives in the Supply Chain
During the May 3rd Federal Open Market Committee (FOMC) meeting, FOMC voting members raised the Federal Funds Rate by another 25 basis points; making the target Federal Funds Rate between 5% and 5.25%. The implications for food and agribusinesses are twofold…
Commercial banks and the Farm Credit System have been the dominant lenders to farmers for the past century, but new participants have entered the ag credit markets in recent years. This group includes ag input suppliers, and in more recent times, specialized collateral-based lenders that use land or other assets as the collateral for their farm loans. These “non-traditional lenders” have been consistently capturing market share in the agricultural credit markets since the 1980s financial crisis in agriculture. In 2019, they held almost 13% of the total farm sector debt (USDA) and accounted for 30% of the active loans based on data from the Kansas Farm Management Association. We know little about these non-traditional lenders because they do not face the same public reporting requirements as traditional lenders. The purpose of our study — Strategic Behavior of Non-traditional Lenders in the Agricultural Credit Markets — was to examine the credit products, operational performance and business models of these new players in the ag credit markets.
When Public Opinion is Knocking at YOUR Door: Consumer- and Public-Driven Changes in Agricultural Industries
Looking around in spring of 2022 (it’s close enough to spring, right?), there is no shortage of topics on which there seems greater social, political and economic discord than ever before. Agriculture is not immune to public pressures driving discontent; it seems we are all interested in where our food comes from nowadays. Increased pressures and, honestly, distress over the last two years have stressed consumers who have sought to make decisions best for their families amidst supply chain strains, changing product availability and rising prices.